Exhibit 10.3


 


INVESTMENT
TECHNOLOGY GROUP, INC.


AMENDED
AND RESTATED RESTRICTED SHARE AGREEMENT


 


THIS AMENDED AND RESTATED
RESTRICTED SHARE AGREEMENT (this “Agreement”), dated as of August 6, 2008
by and between Investment Technology Group, Inc. (the “Company”), a
Delaware corporation, and Robert C. Gasser (the “Employee”).


 


WHEREAS, this Restricted
Share Award was previously awarded to the Employee under the Company’s 1994
Stock Option and Long-Term Incentive Plan, as Amended and Restated (the “Plan”)
in satisfaction of the Company’s obligations under the employment agreement by
and between the Company and the Employee originally dated September 15,
2006 and amended and restated effective August 6, 2008 (the “Employment
Agreement”), subject to stockholder approval of the performance goals set for
the award.


 


WHEREAS, the stockholders
approved the performance goals set for the award on May 8, 2007.


 


WHEREAS, the Company and the
Employee desire to amend and restate this Agreement to provide that payments
due to the Employee under this Agreement upon the Employee’s termination of employment
will be compliant with the applicable requirements of section 409A of the Code
(as defined below) and the regulations promulgated thereunder.


 


NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein, and for other good and valuable consideration, the parties hereto agree
as follows.


 


1.                                      Award of
Restricted Shares.  Pursuant to the provisions of the Plan,
the terms of which are incorporated herein by reference, on October 4,
2006 (the “Date of Grant”), the Employee was awarded 31,250 Restricted Shares
(the “Award”), which number of Restricted Shares represents 6,250 Restricted
Shares for the period October 4, 2006 through December 31, 2006 and
25,000 Restricted Shares for the 2007 calendar year, subject to the terms and
conditions of this Agreement, the Plan and approval by the Company’s
stockholders of the performance goals set for the Award.  The stockholders of the Company approved the
performance goals set for the Award on May 8, 2007.  Capitalized terms used herein and not defined
shall have the meanings set forth in the Plan. 
Except as otherwise expressly provided herein, in the event of any
conflict between this Agreement and the Plan, the Plan shall control.


 


2.                                      Terms and
Conditions.  It is understood and agreed that this
Award is subject to the following terms and conditions:


 


(a)                               Vesting and
Payment of Award.  Subject to
Sections 2(b), 2(c) and 2(d) below and the other terms and
conditions of this Agreement, the Restricted Shares shall vest 


 


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and
be paid on the dates set forth on Exhibit A; provided that the
performance goal set forth on Exhibit A has been achieved and the
Employee has not incurred a Termination of Service as of the applicable dates
set forth on Exhibit A.  On
the date the Restricted Shares vest and are paid in accordance with Exhibit A,
the Employee shall be paid one share of Common Stock for each Restricted Share
that becomes payable in accordance with Exhibit A.


 


(b)                               Termination
Prior to a Change in Control.  Notwithstanding Section 2(a) above
and subject to Section 2(d) below, in the event the Employee incurs a
Termination of Service for Good Reason (as defined in the Employment Agreement)
or not for Cause (as defined in the Employment Agreement) prior to a Change in
Control (as defined in the Employment Agreement) (for purposes of this
Agreement, “Change in Control”), the Restricted Shares shall continue to vest
and be paid as if (i) the performance goal set forth in Exhibit A
has been achieved and (ii) Employee remained employed by the Company
through the first anniversary of the date of his Termination of Service;
provided that the Employee executes (and does not revoke) a Release (as defined
in the Employment Agreement).


 


(c)                                Change in
Control; Death or Disability.  Notwithstanding Section 2(a) above,
the Restricted Shares shall become immediately vested (as if the performance
goal set forth in Exhibit A has been achieved) and paid in full
within thirty (30)  days following
(i) a Change in Control, (ii) the Employee’s Termination of Service
due to the Employee’s Permanent Disability (as defined in the Employment
Agreement) or (iii) the Employee’s death. 
Notwithstanding the foregoing, payment shall only be made in accordance
with (A) clause (i) of the preceding sentence if the transaction
constituting a Change in Control under this Agreement is also a “change in
control event” within the meaning of such term under Treas. Reg. section
1.409A-3(i)(5) and (B) clause (ii) of the preceding sentence if
the Employee’s Permanent Disability would cause the Employee to be considered “disabled”
within the meaning of such term under Treas. Reg. section 1.409A-3(i)(4).


 


(d)                               409A Six-Month
Delay.  Notwithstanding any provision
of this Agreement to the contrary, if, at the time of the Employee’s
Termination of Service, the Company has securities which are publicly traded on
an established securities market and the Employee is a “specified employee” (as
defined in section 409A of the Code) and it is necessary to postpone the
commencement of any payments otherwise payable pursuant to this Agreement as a
result of such termination of employment to prevent any accelerated or
additional tax under section 409A of the Code, then the Company will postpone
the commencement of the payment of any such payments hereunder (without any
reduction in such payments ultimately paid or provided to the Employee), until
the first business day following the date that is six months following the
Employee’s “separation of service” with the Company (within the meaning of such
term under Code Section 409A).  If
any payments are postponed due to such requirements, such amounts will be paid
to the Employee in a lump sum on the first payroll date that occurs after the
date that is six months following the Employee’s “separation of service” with
the Company.  If the Employee dies during
the postponement period prior to the payment of the postponed amount, the
amounts withheld on account of section 409A of the Code shall be paid to the
personal representative of the Employee’ s estate within sixty (60) days after
the date of the Employee’s death.


 


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(e)                                Other
Termination; Forfeiture of Unvested Award.  Except as otherwise provided in this Section 2,
in the event of Termination of Service of the Employee prior to the date the
Award otherwise becomes vested, the Award shall immediately be forfeited by the
Employee and become the property of the Company.


 


(f)                                 Certificates.  Upon
the vesting and payment of Restricted Shares pursuant to Section 2 hereof
and the satisfaction of any withholding tax liability pursuant to Section 5
hereof, the certificates evidencing such Common Stock shall be delivered to the
Employee or other evidence of issuance of Common Stock shall be provided to the
Employee.


 


(g)                                Rights of a
Stockholder.  Prior to the time a Restricted Share is
vested and paid hereunder, the Employee shall have no right to transfer, pledge,
hypothecate or otherwise encumber such Restricted Share, nor shall the Employee
shall have any other rights of a stockholder, including, but not limited to,
the right to vote and to receive dividends (subject to Section 2(a) hereof)
at the time paid on such Restricted Shares. 
Dividends declared and paid prior to the time a Restricted Share vests
and is paid shall accumulate and be reinvested in additional Restricted Shares
that vest and are paid according to the same schedule as the Restricted Shares
to which they relate.


 


(h)                               No Right to
Continued Employment.  This Award
shall not confer upon the Employee any right with respect to continuance of
employment by the Company nor shall this Award interfere with the right of the
Company to terminate the Employee’s employment at any time.


 


(i)                                   Termination of
Service.  “Termination of Service” means
the Employee’s “separation from service” (within the meaning of such term under
section 409A of the Code and the regulations promulgated thereunder) with the
Company and its subsidiaries.  An
employee employed by a subsidiary of the Company shall be deemed to incur a
Termination of Service if the subsidiary of the Company ceases to be such a
subsidiary and the employee does not immediately thereafter become an employee
of the Company or another subsidiary of the Company.  Temporary absences from employment because of
illness, vacation or leave of absence and transfers among the Company and its
subsidiaries shall not be considered a Termination of Service.


 


(j)                                  Adjustments.  If any event described in Section 5.5 of
the Plan occurs, the Committee shall be required to make appropriate adjustment
in accordance with the terms of Section 5.5.


 


3.                                      Transfer of
Common Stock.  The Common
Stock to be paid hereunder, or any interest therein, may be sold, assigned,
pledged, hypothecated, encumbered, or transferred or disposed of in any other
manner, in whole or in part, only in compliance with the terms, conditions and
restrictions as set forth in the governing instruments of the Company,
applicable federal and state securities laws or any other applicable laws or
regulations and the terms and conditions hereof.


 


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4.                                      Expenses of
Issuance of Common Stock.  The
issuance of stock certificates hereunder shall be without charge to the
Employee.  The Company shall pay, and
indemnify the Employee from and against any issuance, stamp or documentary
taxes (other than transfer taxes) or charges imposed by any governmental body,
agency or official (other than income taxes) by reason of the issuance of
Common Stock.


 


5.                                      Withholding.  No later than the date of vesting and payment
of the Award granted hereunder, the Employee shall pay to the Company or make
arrangements satisfactory to the Committee regarding payment of any federal,
state or local taxes of any kind required by law to be withheld at such time
with respect to such Award and the Company shall, to the extent permitted or required
by law, have the right to deduct from any payment of any kind otherwise due to
the Employee, federal, state and local taxes of any kind required by law to be
withheld at such time.  The Employee may
elect to have the Company withhold Common Stock or any dividend equivalents to
pay any applicable withholding taxes resulting from the Award, in accordance
with any rules or regulations of the Committee then in effect.


 


6.                                      References.  References
herein to rights and obligations of the Employee shall apply, where
appropriate, to the Employee’s legal representative or estate without regard to
whether specific reference to such legal representative or estate is contained
in a particular provision of this Agreement.


 


7.                                      Notices.  Any
notice required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been given when delivered personally or by
courier, or sent by certified or registered mail, postage prepaid, return
receipt requested, duly addressed to the party concerned at the address
indicated below or to such changed address as such party may subsequently by
similar process give notice of:


 


If to the Company:


 


Investment
Technology Group, Inc.

380 Madison Avenue


New
York, NY 10017


Attn.:
General Counsel


 


If to the Employee:


 


At the Employee’s most recent address shown on the Company’s corporate
records, or at any other address at which the Employee may specify in a notice
delivered to the Company in the manner set forth herein.


 


8.                                      Costs.  In any action at law or in equity to enforce
any of the provisions or rights under this Agreement, including any arbitration
proceedings to enforce such provisions or rights, the unsuccessful party to
such litigation or arbitration, as determined by the court in a final judgment
or decree, or by the panel of arbitrators in its award, shall pay the successful
party or parties all costs, expenses and reasonable attorneys’ fees incurred by
the successful party or parties (including without limitation costs, expenses
and fees on any appeals), and if the 


 


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successful
party recovers judgment in any such action or proceeding such costs, expenses
and attorneys’ fees shall be included as part of the judgment.


 


9.                                      Further
Assurances.  The
Employee agrees to perform all acts and execute and deliver any documents that
may be reasonably necessary to carry out the provisions of this Agreement,
including but not limited to all acts and documents related to compliance with
federal and/or state securities laws.


 


10.                               Counterparts.  For convenience, this Agreement may be
executed in any number of identical counterparts, each of which shall be deemed
a complete original in itself and may be introduced in evidence or used for any
other purposes without the production of any other counterparts.


 


11.                               Governing Law.  This Agreement shall be construed and
enforced in accordance with Section 10 of the Plan.


 


12.                               Entire
Agreement.  This
Agreement, together with the Plan, sets forth the entire agreement between the
parties with reference to the subject matter hereof, and there are no
agreements, understandings, warranties, or representations, written, express,
or implied, between them with respect to the Award other than as set forth
herein or therein, all prior agreements, promises, representations and
understandings relative thereto being herein merged.


 


13.                               Amendment;
Waiver.  This Agreement may be amended,
modified, superseded, canceled, renewed or extended and the terms or covenants
hereof may be waived only by a written instrument executed by the parties
hereto or, in the case of a waiver, by the party waiving compliance.  Any such written instrument must be approved
by the Committee to be effective as against the Company.  The failure of any party at any time or times
to require performance of any provision hereof shall in no manner affect the
right at a later time to enforce the same. 
No waiver by any party of the breach of any term or provision contained
in this Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such breach, or a waiver of the breach of any other term or covenant contained
in this Agreement.


 


14.                               Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.


 


15.                               Application of Section 409A.  This Agreement is intended to comply with the
applicable requirements of section 409A of the Code and the regulations
promulgated thereunder, and shall be administered in accordance with section
409A of the Code.  Notwithstanding any
provision of this Agreement to the contrary, payments made under this Agreement
may only be made in a manner and upon an event permitted by section 409A of the



 


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Code
and all payments to be made upon a termination of employment under this
Agreement may only be made upon a “separation from service” (within the meaning
of such term under section 409A of the Code). 
To the extent that any provision of this Agreement would cause a
conflict with the requirements of section 409A of the Code, or would cause the
administration of this Agreement to fail to satisfy the requirements of section
409A of the Code, such provision shall be deemed null and void to the extent
permitted by applicable law.  In no event
shall the Employee, directly or indirectly, designate the calendar year of
payment.


 


[SIGNATURE PAGE FOLLOWS]


 


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IN WITNESS WHEREOF, the undersigned have
executed this Grant Agreement as of the date first above written.


 


	
   

  	
  INVESTMENT TECHNOLOGY GROUP, INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Maureen O’Hara

  
	
   

  	
  Name: 

  	
  Maureen O’Hara

  
	
   

  	
  Title:

  	
  Chairperson of the Board of Directors

  



 


I hereby accept the Stock
Unit Grant described in this Grant Agreement, and I agree to be bound by the
terms of the Plan and this Grant Agreement. 
I hereby further agree that all the decisions and determinations of the
Committee shall be final and binding.


 


	
   

  	
  /s/ Robert C. Gasser

  
	
   

  	
  Robert C. Gasser

  



 


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